Absolute Power Corrupts Absolutely?: A Political Agency Theoretic Approach

Swapnendu Banerjee (Bandyopadhyay) and Soumyarup Saha

MPRA Paper from University Library of Munich, Germany

Abstract: We explore a power relationship between a ‘corrupt’ politician and a political worker where the politician can order an illegal corrupt effort to be performed by the worker. Using a moral hazard structure we show that when the politician’s power is sufficiently high the politician optimally uses power and relies less on wage incentives. But when the power is low, the politician optimally shuns power and relies more on wage incentives. We also talk about optimal bolstering of power through threats depending on the level of power of the politician. This model has implications on the larger principal-agent structure, although we model it as a political corruption game.

Keywords: Power; Corruption; Hidden Action; Perception; Bolstering (search for similar items in EconPapers)
JEL-codes: D86 J47 K42 (search for similar items in EconPapers)
Date: 2024-05-30
New Economics Papers: this item is included in nep-gth, nep-law, nep-lma, nep-mic and nep-pol
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